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tv   Mad Money  CNBC  June 7, 2016 6:00pm-7:01pm EDT

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>> oih, strictly for a trade. i agree with grasso. i think the service names are the ones you want to own here. >> improving margins. >> i'm melissa lee. see you back here tomorrow at 5:00. my mission is simple -- to make you money. i'm here to level the playing field for all investors. there's always a bull market somewhere and i promise to help you find it. "mad money" starts now. hey, i'm cramer! welcome to "mad money," welcome to crercramerica. other people want to make friends, i'm just trying to save you some money. my job is to not just entertain you but to educate and teach you so call me at 800-743-cnbc or tweet me @jimcramer. through all the noise, through all the nuttiness it's hard to remember exactly what kind of
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environment drives stocks highers, isn't it? over the average either at or striking distance from the year, dow gaining 18 points, s&p advanced .13, nasdaq inched down, we have to go over what allows us to reach these levels. the backdrop that's conducive to higher prices for the overall market. in short, what's so special about stocks right now that we are at or near or challenging these high s? first, investors like to see low inflation. when you have low inflation, that means the long-term value of stocks, the future earnings streams you're buying are going to be preserved. high inflation erodes that value because it means those future earnings will have less purchasing power. last friday we gotten a employment number that signalled there is no inflation in the system other than the mandated inflation that comes from higher state and local minimum wages. tame inflation means that all stocks are worth more so even if you hear that the stock market
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is expensive, it might not be as expensive as it seems given inflation isn't eroding the value of the gains you get from higher stock prices of future dividend payments down the road. remember, you've got the capital stream and the dividend appreciation scheme, they're worth more in low inflation. second positive, the main competition your stocks face, the bond market, just can't measure up in an environment where the federal reserve is putting up more -- it can't put up more rate hikes than it's got on hold, right? it means those stocks with the good dividends, the ones that yield north of, say, 3%, they become more attractive. so how much does this matter? let's really play this out. why don't you look at the stock of caterpillar, that's the company that's routinely bashed by hedge fund managers because of exposure to weak areas like mining, coal, oil exploration and chinese infrastructure and they're all doing bad. but as poorly as the company might be performing, the stock has a 4% yield and its dividend
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is safe for now. so even though caterpillar's near-term prospects are suboptimal, the yield chasers don't care, you know what they do? buy. the third thing the bulls always want to sea, a weakening dollar. now i've said to you over and over again that as the dollar goes so goes this stock market. with the fed on hold, foreigners are going to be buying far fewer dollars than they would have if we were still staring down the barrel of a rate hike. i know the interest rate you get in typical savings account isn't anything to write home about these days. but suppose you live in europe and you're earning literally zero interest on euros in a german bank? why not buy dollars, stick your money in an american bank? foreign investors will be far more likely to do that if they knew a rate hike was on the horizon, which is why friday's lousy employment report put the big kibosh on any near term appreciation in the dollar. now, with the weaker dollar, our exports are priced more competitively versus their overseas customers and earnings that are worth more when they're
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translated from foreign currencies back into weaker dollars, that's what we want. higher earnings estimates typically lead to higher stock prices. and that's how international companies like johnson & johnson, international flavors and fragrances and 3m cold all hit all-time highs today as they could be with other foreign companies and reap the benefits thanks to the weaker greenback and more money left over. finally fourth positive, we want to see higher oil prices because that tells us the global economy is getting better. now great deal on the oil rally since the bottom in february has come from cutbacks in supply, but the saudis, who are now in charge of pricing because opec has basically become irrelevant, we should stop covering it, are now telling people demand from china and india has gotten stronger. that's what's lifting prices. the oil stocks carry a bizarre disproportionate amount of weight in this market because they's so darn many of them, including oil companies that have humongous amounts of debt
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and their own problems have hurt the lenders. typically the big banks, many of which went hog wild with every oil company and its brother. when the price of crude goes higher, these companies can sell oil for more money or sell futures, oil future which is then allows them to pay back their debts which then causes the bank stocks to do better even as you'd expect them to perform poorly with interest rates staying so low. oil stocks like pioneer natural resources and others are the tales that are wagging the market's dog. on any given day there will be some part yey poopers to the thesis. we asked the ceo of the new drug company valeant and his company reported really disappointing numbers this morning and the stock lost almost 15% of its value. apparently the competition took advantage of the disarray in
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their skin and eye care divisions. you mow that j & j and allergen are doing their best to eviscerate a worn enemy. at the same time, he told us he had to do price rollbacks, so that doesn't make good for a bottom line. he's just setting the stage for reduced expectations so he can overdeliver on his underpromises. or perhaps valeant is in much worse shape than he thought when he came on the show. too soon to tell. we'll have to wait a couple quarters to find out. then there's rafflph lauren, th apparel company that slashed its estimate this is morning and told a dire tale of layoffs and tough love as the mall keeps mauling retailers, excuse my philadelphia accent. sometimes the stock market judges companies too harshly and initially sent this stock down 10 points before a deserved late-day rally, at the close just down two and change. i stefan larson turned around
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gap's old navy division to bite the bullet and cut back on overhead and excess capacity. we're overstored. you can find ralph lauren stuff in too many places. if the stock was still in the hundreds and not prepped for this tough love i could understand today's morning visceral reaction. but down here in the 90s i say give me and stefan a break. here's the bottom line, when you have the basics working for you not against you, investors find reasons to throw money at the market. and right now that money is sticking on the stocks with the best global stories. let's go to tuna in michigan. tuna? >> caller: booyah, what's up, jim? i was just wondering what i should invest my money in, walmart, j.c. penney or sears. >> well, i mean sears absolutely not. sears is sell.
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j.c. penney -- don't buy. walmart? i'm telling people, walmart is could. how about vincent in missouri. vincent? >> caller: hi, jim. thanks for taking my call. >> okay. >> caller: my concerns are i bought a stock called rr donnelly and i noticed in an article that they're going to go forward, i think, with a spinoff in october. >> right. >> caller: resulting in thee companies. >> right. >> caller: i own about 300 shares of it. do you have any ideas -- >> well, i pulled it up yesterday. street.com had a conference and i pulled up with tim quinlan who's the ceo. i feel more strongly than ever that the three companies are going to produce a good return. the chart is good, too. i think rr donnelly should be bought and bought aggressively. i see 18 coming. it's 16.59 now.
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quinlan is doing a dynamite job as his own internal activist. lesson learned, when the stories wall street watches the most are positive not negativing investors find reasons to buy stocks. right now they're investing in stocks with the best international stores. on "mad money" tonight, another day, another spinoff, less than a year after a landmark split hewlett-packard in two companies, hpe is at it again and i have the exclusive to find out what's next following that merger with computer sciences. then jetblue announced a fare hike and it could impact more than just your vacation budget. i'll tell you what the move signals for the overall airline industry. it's a stock flying on helping thousands of businesses that have a bigger presence online. can wix help you score clicks? i'll talk with the ceo. still with cramer!
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compare.com sometimes you have no idea how much value is locked inside a company until you break the darn thing up. look at hewlett-packard. last october the company spun off its faster-growing divisions that catered to business classes, hp enterprise with legacy slow growth printing company naming itself hp ink. often the first round of breakup is the beginning. i've been a fan of hp enterprise for month but even i didn't see the latest value move creation coming. two weeks ago they reported a robust quarter but they announced that they were spinning off their enterprise services unit and merging it with the computer sciences corporations in a stock-for-stock deal to create a global pure play it services powerhouse, we call it new co. hp enterprise will own roughly
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half and the sinnynergies will enormous. let's speak with meg whitman, the ceo of hewlett-packard enterprise and her attempt to create more value. meg, you've done it again, we created more value, we like your first split, now we have another but i think some of our viewers are concerned about what they're going to own if they buy a share of hewlett-packard enterprises today. >> well, if you buy a share of hewlett-packard enterprise today, what you will participate in is an unlocking of value for two new companies. so the es portion of our business -- enterprise services -- will spin merge and create a $26 billion pure play which u.s. shareholders today would own half of that company. then, of course, you maintain your shareholders in hewlett-packard enterprise which i think has an incredible future because we'll be able to focus on three areas, the software defined data center, which is growing, the edge, the campus
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branch and the edge where compute is moving and we have a fabulous asset in aruba and then, of course, our software portfolio. >> now, i think that there are many people who hear the term "edge" and for all they know they're thinking of shaving cream. so we're going to solve this once and for all. you've been using -- including with my friend tony, i'm very proud, he called up the lightning round, he gave me that -- but he asked you directly and you gave a definition of edge that i think would not only be exciting but rigorous when you talk about the car. so could you go through that for our viewers who will then understand immediately why this is where you want to be? >> yeah, you're right. we throw around terms like "campus, branch, edge." so let me tell you what we mean by the edge and i think the industry means by the edge. a lot of aircraft engines, hospital beds, sensors, are being built like mad. there's going to be billions of connected devices. but i think the best
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illustration is a self-driving autonomously driving car. and i don't know how many of your viewers have ever been in an autonomous driving car but it's quite an experience. the good news is, you're lucky if you don't get hit, but that's fantastic. think about it. it is taking in huge amount of data from all around the car, 360 degrees, it has to figure out is that a stop sign? a person? a car? a tree. then the car has to decide what to do realtime and when i first took a drive in a car like this i was in berlin and i get out of the car and the driver -- because you do always have to have a driver just in case -- said "do you want to see the data center that process thises data?" and i said "yeah." and i wasn't sure what i was going to see and he opened up the drunk of the car and he said "look at our baby data center." on board the car was the processing of all this
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information. so it's not in the cloud, it's data center at the edge, in this case the edge being the car. >> that's something hewlett-packard want enterprises wants to dominate in the way hewlett-packard used to dominate the personal computer and server world, right? >> yeah. i mean, this is natural power alley for us. we're expert at compute, storage, networking. we're expert at doing that in a very small footprint with low power consumption because, remember, if your data center is in the back of the car, you have to drive quite long distances without recharging, if you will, the power for that data center. so this is core technology for us, we're super excited and i think it's a growth area for the company. >> you came into a broken company that i didn't like the balance sheet and was greatly concerned. you have done several things. you've created a more nimble faster-growing company. two, you have enabled people to participate in other ends of the business that you split off. but, three, you still have
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amazing cash generation, a lot of money to buy back stock, maybe niche acquisitions like aruba which made it so you're far more competitive in networking. so if you can tell us the journey that you've done and yet at the same time explain we should pay more for your company as the market is doing since it's at its all-time high it would put in the perspective for our viewers. >> sure. well, we started the turnaround journey four and a half years ago and i said at the time it was going to take five years. turnarounds of this scale and magnitude just. do i've done it before. it's how long it takes. there are milestones along the way but we are now rounding the bend out of that turnaround. so what did we do? we got our cost structure in line with our revenue trajectory. we reignited the innovation engine at hewlett-packard. we brought in a new leadership team. turnarounds are not for everybody, i will tell you. we reignited our focus on the customer. the core dna of this company is around innovation and customer care and customer focus.
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and we repaired the balance sheet. to your point, we had about $12.5 billion of net debt on the operating company. today we have about $5.5 billion of net cash on hewlett-packard enterprise. and then, of course, we began to reshape the portfolio, separating hp ink, the p.c. and printing business from hewlett-packard enterprise the data center business. we spun off 51% of our business in china that was called h-3-c to shing waugh university. my conclusion was better to own something fantastic than 100% of nothing over time. we've made some small portfolio modifications like selling tipping point. we bought voltage and then, of course, the most recent announcement was separating es from our core business and remember hpe, without es, will be a faster growing higher margin better free cash flow business.
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so that will allow us to invest in things like the campus brands. >> that's giving the enterprise services businesses to new co, as we call it, with csc, a company i like very much and i've been recommending for a long time. i also want you to explain why we would pay more for a faster-growing company that is spinning off a lot of cash. i think there's a perceptions but you let go in enterprise something that was -- enterprise service that was very exciting that we wanted a piece of but you're still giving us a piece of it, yet you're making so the company that you're left with is faster growing. >> exactly. so remember, shareholders of hpe today will own half of the new company. so they'll be able to participate in the upside led by a great management team and be able to part naicipate in a business that ought to carry a much higher multiple with free cash flow. we've been clear that a big part of our strategy is to buy back shares. your viewers know when you buy back shares it improves your
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eps. if you combine that with a higher multiple, that can lead to higher share prices if we execute and we got a lot of confidence in our ability to execute. i'm really proud of this company because we have learned how to execute. look at the separation of hp ink from hewlett-packard enterprise. the biggest company separation that's ever been done. flawless, on time, on budget, basically nine months from announce to operating as two separate companies with no disruption to customers. we have become an execution machine and i think all of hewlett-packard should be proud of that. >> last question. it looks like some of the other companies in your industry are actually still selling at a more expensive rate on the future earnings stream than you are. so there would be room even if you look at your company and the speed of growth and the balance sheet versus others in your industry that it would be obvious that you should be trading at a premium to those companies. >> well, i think, listen, we are really doing a great job of -- at beating our customers in the marketplace which is the ultimate test.
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if you look at our networking business. our networking business grew 18%. cisco's shrunk three. if you look at our storage business, our all-flash storage array is growing twice the rate of the market. we've gained share every quarter for the last two years against ibm, emc and our all-flash business is as big as pure and probably growing a bit faster. so we are leaning in. we've gotten very competitive over the last four years and we anticipate that that will continue. we've got the right products, the sales force is fired up, our partners and distributors are fired up. that's what it takes. >> i think you've done a phenomenal job doing this. i don't think people realize how difficult it is yet you industrial a stock that i think is way too cheap. i want to thank megawhitman, president and ceo of hewlett-packard enterprise for coming on the show. great to see you, meg. >> great to see you, thank you. >> this one isn't over. she's created a lot of value. there's more value creation ahead. stick with hewlett-packard enterprises, stick with cramer.
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coming up, it's the company powering sites online with more than 86 million registered users. >> building amazing things on wix is what drives us to get excited. >> but today a new tool takes the stage. how will the introduction of artificial intelligence impact the future of the web? crimer is talking innovation with the ceo of wix just ahead. you pay your car insurance premium like clockwork. month after month. year after year.
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any market led by both the airlines and the oils is truly a sight to behold. throughout this whacky period where oil and the dollar have tightly controlled the direction of the market, we've seen lot of industrial markets go higher when oil rallies and the dollar weakens but what we haven't had is a rally in the airlines. that's been worrying the heck out of me. in fact, it's been my principle
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fear because the airlines symbolize commerce of all kinds, whether it be discretionary or commercial. the conventional wisdom was as oil goes higher the cost of jet fuel rises and the margins for airlines shrink and this group is hurt by the runup in oil. i disagree with the conventional wisdom. we've done a huge amount of home work behind the scenes here and soul searching, too, for that matter and on the tremendously cheap group that i really would love to push you but much to our dismay as stock pickers, the airlines have been going down not because of fuel but because of the same old same old of the old days. price cutting. the price wars that have come from adding capacity finally hit home, even as most of us struggle to recall the last time we were on a flight that wasn't extremely full and therefore we thought presumably lucrative. suddenly there's hope. jetblue we just learned has put through price increases and seem to be sticking. american airlines confirmed in august they're going to change their frequent flier rewards
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program from one miles based to one based on how much money you spend. that will be more income. at the same time the dollar is weakening, that will help carriers with international exposure, namely american, delta, united continental while the increase in the price of oil has helped their texas roots. these airlines are trading at historically low price-to-earnings multiples. investors don't trust the companies can earn anywhere near what the analysts say they can so when you see american airlines or united continental trading at five times earnings or delta at six times earnings, that valuation says you're looking pat what's known as peak earnings and it's all downhill from here. when the airlines reported this past earnings season with the strong southwest which not coincidentally trades 11 times earning the news is all dismal away from southwest as each of the big airlines were making much less money per seat mile -- that's a key metric -- than has
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been expected. it's been a real ruff time for the industry and that's reflected in the horrible stocks. but with even one fare hike announced by jetblue, there's newfound sense that perhaps it's strong enough to stop the price cutting and the industry is no longer adding as much capacity as has been expected. whatever these airlines are healthy they play an elaborate game of chicken. a game that says they won't add much capacity but then they buy a bunch of new planes to cash in on the higher fares and the next thing you know the price wars have begun because they're doing the same darn thing. that's why the airline stocks have had so much trouble getting traction. maybe the tide is turning. it's probably too early to call an entire turn in the this group but it's safe to say the worst is over. that's fantastic news for the market given old timers like me value the forces are the best barometer of the real strength of the economy, not even the labor number we had friday. fares have been known to be rolled back then rolled back, rolled up. that's why i won't say go buy
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jetblue. my bottom line, i remain committed to recommending southwest which is symbol lov and that's made money during the vicious price words in the past. still it's no longer taking your life in your hands if you buy delta or american. that's a good sign for everything although i don't know if i'll ever get over the anomaly of seeing both the airlines and the oils co-existing in the top 10 gainers in the s&p 500 like they did today. let's go to craig there kin cal. craig? >> caller: booyah, jim. >> booyah, craig. >> caller: what is the better investment in the long-term, u.p.s. or fedex? >> you know, i debate this -- i have been debating these two from when stephanie link and i used to work on action alerts together and as much as i think u.p.s. is cheaper, here's the way i look -- fedex is better. buy fedex. roger in mississippi. roger? >> caller: jim, a big southern
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high y'all from dixie. >> i like that. what's up? >> caller: not much. my question is, your recent advice has been not to invest in fossil fuel stocks but what is your recommendation on them as a long-term hold, specifically conocophillips. >> all right, now conocophillips, here's the deal. i am concerned that they do not have the growth profile or the yield that i want which is why i've been telling people to buy the stock of occidental, oxy, which is owned by my charitable trust and has a yield i think is safe because they have enough money to not have to borrow to pay for the dividend. last time i checked, airlines were still running on jet fuel so while it's odd to see stocks in this disparate group rise together, it's a good sign, too. much more "mad money" ahead, including my exclusive with the ceo of wix.com. that's up 20% year to date. has it figured out a template for profits? it seemed like everyone gave up from a stock that i know from a
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tweet you love. advanced microdevices. a strange thing happened on the way to the graveyard. it staged a turnaround. tonight i'll go off the charts to see if that move can continue and tonight's edition of the lightning round. so stick with cramer! this just got interesting. so why pause to take a pill? and why stop to find a bathroom? cialis for daily use, is the only daily tablet approved to treat erectile dysfunction so you can be ready anytime the moment is right. plus cialis treats the frustrating urinary symptoms of bph, like needing to go frequently, day or night. tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain, or adempas for pulmonary hypertension, as it may cause an unsafe drop in blood pressure.
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lately virtually everything related to cloud computing has been on fire, that includes wix.com. cloud-based web design companies that help small businesses build their own web sites. with a stock up more than 20% year to date, having a web site part of starting a new business and wix makes it easy. the company has a platform that allows users to design their own web sites with mobile compatibility. but if you use the free platform, wix sells advertising space. that's why wix makes its money from users who have a premium subscription which gives them bandwidth support, no ads and the ability to choose your demain name. wix is the real deal. the company delivered a strong beat in the quarter, they have over 85 million users plus just today wix launched a new artificial intelligence power web design platform that can
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create a gorgeous sight tailored to the customers need in a matter of minutes. can this stock keep climbing? let's take a cleeoser look with avishai abrahami, the co-founder and chairman of wix.com to find out where his company is going. good to see you, sir. >> a pleasure. >> we saw a lot of super bowl ads and people question whether the super bowl ads pay off or just feel good and it looks like you got a lot of customers. >> well, absolutely. we are actually very happy with the results. that's why we do it year after year now and we saw in terms of efficiency actually it was probably one of the more efficient advertisements we did. so if we measure the return and customers acquisition, it was really good. >> and number of new customers in the first quarter? >> 5.3 million. >> 5.3 million? >> new users in the first quarter. >> where were these people before wix? what were they doing? >> well, you know, 50% of the businesses in the united states today don't have a web site, of the small businesses.
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that's a crazy amount. >> so in other words i know that cheryl sanberg on the facebook call basically said listen, there's millions of users but that means there's still millions to come. >> yes and i think probably 80% of the ones that need web sites probably need to replace it to get better mobile support or a more efficient web site. you want your web site to look great and be efficient. the other thing is that mobile is always changing so you want to have something that fits mobile and so this is a big part of our customer. another part is the ones that you don't imagine that need a web site. we have web sites for soccer club clubs, events, weddings. >> so recently we heard jeff bezos talk about how he has a thousand people on artificial intelligence. sales force talks about artificial intelligence, ibm talks about cognitive -- you have artificial intelligence. why do i need artificial intelligence for my own web site? >> i don't know if you need it for your own web site, but for building the web site it makes sense because building the web site, when we look at our
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customers the biggest thing is that, well, a lot of them don't have the time and a lot of people don't know what content, a lot don't have the design skills. we wanted to take all of that away so basically the ai is doing that for you. you say this is my content, this is what i do and the ai magically builds a web site around it. >> how much does that cost? >> it's free. >> it's free? >> it's free. it t regular premium upgrades from wix in a minute without no touch you have a beautiful web site and you can use ai to modify. so it's super easy. that's the magic of it. >> how many users do you have as of today? >> 86 million. >> why aren't you making money yet? >> well, we actually are guided for 42 to -- >> in the future. >> this year. for this year. and i think that if you look at businesses, we're probably in a unique position where we're growing faster than most and are positive. >> so in other words, another
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company that i should look into deferred revenue to see how much it is you have to pay on a ratable amount and the accounting rules don't allow you to take all of that up front. you have to do it month by month by month. >> yes. so we have a lot more money in the bank than we have to allow to show on the stock market. >> is it up to you to stay independent? i'm sure there are a lot of companies -- we have had so many companies that are involved in designing webs and advertising and they usually get acquired. i mean, that's what happens. that's the natural course of things in this particular business. you like being independent. >> we love to do what we do. i think being independent is exactly what they have to do, crazy things like ai for your web site. and i think this is why we are passionate about what we're doing and we're going to hopefully intend to stay this way for a long time. >> can you tell me the interaction between google and wix versus other people who might be in the same business? >> well, i think if you look at it, we have a lot of partnerships with google and the
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result is that we're able to do a lot of advertisement for our customers efficiently. our site works very well at google search engine optimization on wix is very good. >> that's what i want to talk about because i know some people are always concerned that google changes the algorithm and they get hurt. there's been issues with yelp and google changing algorithm. but you work closely enough with them that one day you won't wake up and they change the algorithm? >> well, i don't know if they'll ever change the algorithm, but i know we're not trying to optimize against the algorithm, we're just trying to create great web sites for our customers and i think google continues to optimize to say sites should be ranked higher. so i think our goals are pretty much the same, great content, great web site, get them higher. >> let's say i want to do online ordering and i wanted to dove tail with google, wix would offer me a way that would be -- comes to the top? >> yes. well, in new york city it's probably harder to be on the top
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spot but, yes, if you look at the search engine, absolutely we give a great solution. we'll also give you a great way to create online ordering, take away, everything you need. it's part of the platform. beyond that we are also very friendly with a way for you to advertise on google. >> right. >> on facebook, by the way, so you can do either. >> people know how important that is because sometimes google doesn't want it to go that way if you're not partnered. that's avishai abrahami, the ceo, co-founder and chairman of wix.com. five million just added this quarter. >> no, two million subscribers. >> two million subscribers. excellent, "mad money" is back after the break. thank you. imagine if the things you bought every day earned you miles to get to the places you really want to go.
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it is time for the lightning round. then the lightning round is over. are you ready? time for the lightning round. let's start with john in oregon. john? >> caller: hey, jim. jim, considering everything that's going on with hertz car rental business these days, what
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with the spinoff and rental business and activism, what's your take? buy, hold or stay away? >> i was reading a piece by a man who does this stuff. i read all this activist, i read the goldman, i'm not there. i think the industry is being destroyed by uber. i'm just out there saying it. i don't want to touch it because of uber, that's why. let's go to david in texas, david. >> booyah, jim. mov -- >> holy cow, this stock is bottomed. i do not have a case to buy it because my charitablechlumberge and see the bottom. alex in virginia. alex? >> caller: booyah, thanks for having me on. second-time caller. >> excellent. >> caller: i'm calling about alumina. >> no illumina missed the
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quarter and thermo fisher made the corner. bob in south carolina, bob? >> caller: hey, jim, long-time listener, first time caller. >> excellent. >> caller: wlk, buy, sell, or hold? >> why do you need that? dow and dupont are merging. let's not overthink it. ben in texas. ben? >> caller: booyah. time warner. time to buy? >> time warner? that's run by jeff fbird flu cu and we're representatives of bukus america. one more call. joe? >> caller: joe, tell me about achn. >> the last time we looked at this was a long time ago and many things have changed with bacterial infections so we're going to have to go back, a lot of new superbugs, we don't have enough information. i will return with information
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about achn. and that, ladies and gentlemen, is the conclusion of the lightning round. me. sup jj, working hard? working 24/7 on mobile trader, rated #1 trading app on the app store. it lets you trade stocks, options, futures... even advanced orders. and it offers more charts than a lot of other competitors do on desktop. you work so late. i guess you don't see your family very much? i see them all the time. did you finish your derivatives pricing model, honey? td ameritrade. thank you. ordering chinese food is a very predictable experience. i order b14. i get b14. no surprises. buying business internet, on the other hand, can be a roller coaster white knuckle thrill ride. you're promised one speed. but do you consistently get it? you do with comcast business. it's reliable. just like kung pao fish. thank you, ping.
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reliably fast internet starts at $59.95 a month. comcast business. built for business.
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. >> a market like this, one that so many people treat with incredible skepticism no matter what, i'm amazed to see once hated and left for dead stocks fries the ashes and start
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climbing into the stratosphere while gaming unusual adherers. that's why tonight we're going off the charts with a help of a terrific technician who is a professor and my colleague, he sits next to me at realmoney.com. kamich is usually negative but on friday he made a positive case for something i thought left for dead, advanced micro devices, amd. the old beaten down semiconductor company has been making a comeback in recent months, more than doubling from its late january lows and when he goes positive on a company like amd seemed destined if for bankruptcy, that's a puzzle i ought to solve. still, you need to understand why amd had been written off and left to dead for most of the past year. you might recognize amd from its two main businesses, they were making micro processors for personal computers and that's a declining industry. they've been playing second fiddle to intel for ages and they make graphics chips for
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computer and video game consoles, a faster-growing sector where the company finds itself in a distant second-place battle with cramer fave nvidia. the thing about amd while it's trading for four dollars and change, if you zoom back more than ten months to late july of last year the darn thing was trading at just $1.61. you don't just see stocks fall below two bucks if you're doing a good job. in amd's case, last year's brutal decline and the subsequent bouncing boils down to two -- serious problems with its two key markets, p.c.s and gaming. now personal computers we know are in the decline, you can't be in that business anymore. something that became particularly vicious for amd last summer. as for the graphic side, well, let me just say it was losing share left and right thanks to products from nvidia. i have to tell you, nvidia's suite of products is awesome. we profiled them and also intel, newfound competition. these head winds were so brutal
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that amd's revenues fell from -- these numbers are staggering -- $6.5 billion in 2011 down to $4 billion in 2015 while its gross margin -- what they make after the cost of goods sold -- were cut in half over the same period. earnings were annihilated but investors worried the company might be in serious risk of going bankrupt when the major debts start coming due in 2019. however, over the last few months the stock has rebounded with a vengeance and now kay mitch says the charts are compelling. so look at amd's daily chart. kamich points out after bouncing along the bottom for month, months, month, months, the stock took off like a rocket in april. this move was heralded by the on-balance volume. that's an indicator that measures buying and selling pressure which turned positive in february and continued to climb suggesting big
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institutional money matches were buying amd and while the stock is up more than 140% from that february low, kamich notes amd's momentum doesn't seem to be slowing at all, trading well above their 50-day and their 200-day moving average. that's the sign of incredible strength. kamich acknowledges it could be due for a pullback after the run, but given that stocks held off sinking to 4.07 in its lows and has since rocketed back up to $4.51 today, that's an enormous gain in just two sessions, he thinks any additional decline could be a buying opportunity so it wasn't able to go down a lot so he's saying if it goes down a bit it could be a gift. now, how about the longer term weekly chart going back to 2011? this is when you can see what a dying company looks like. maybe resurrection is on the case. you can see that amd has spent
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years trading sideways but that is in technician speak a base being built, a base since its lows in 2012. that's kind of like a launch pad and the stock has taken off. the on balance volume line has begun to rise, the obv, and the moving average, look at this remember the charge is just the starting point looking for ideas. i don't like them to be the be all and end all. the home work comes when you get
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surprise, read kamich and say i want to know about the fundy's. when the deal closes at the end of april, the company has gotten creative about monetizing its intellectual property. when amd last reported a month after ago they announced a $239 million licensing agreement with another chinese-based consortium to develop a system chips for the chinese server market. these kinds of deals take the bankruptcy worries off the table and make investors more
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confident that amd will pay the piper when it faces major debt maturities in a few years, $650 million coming due in 201$2019. another $450 million now intel has 60% margins so there's a lot of room to grow here. ?
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. there's always a bull market somewhere. i'm jim cramer, see you tomorrow!
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>> welcome to the shark tank, where entrepreneurs seeking an investment will face these sharks. if they hear a great idea, they'll invest their own money or fight each other for a deal. this is "shark tank." ♪ i'm an active-duty officer in the united states army. currently, i'm a captain with the army corps of engineers. in 2007, we were deployed to iraq. i did 15 months overseas. it was a very rewarding experience being at the tip of the spear, actually accomplishing missions. and i really believe that we made a difference. man: let's go! for me, physical fitness is very important

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